What Is the Current Sales Strategy at Efi? How Does It Effect the Outcome?
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1. What is the current sales strategy at EFI? How does it effect the Outcome?Answer: – EFI is involved in B2B Sales (EFI OEM and VUTEk)B2C Sales (VUTEk and Printcafe)Before the acquisition of VUTEk and Printcafe, EFI was mainly involved in B2B sales only with minimum contact with the end users or customers. EFI had a head count of 140 employees involved in sales area during this period who were involved in acquiring, retaining and selling the product and software to the OEM’s, who in turn were responsible for the end sales. After the acquisition of the two firms the sales force grew to 200. B2C sales were mainly in EFI PPA products, which called for cold calling and maintaining the prospect of the existing customer base. Where as VUTEk sales were high value sales mainly for commercial use. Most of the sales were targeted at the same customers and the process was redundant as all the 3 sales team catered to mostly the same customers. This led to extra cost as the compensation was based on the sales target, which was invariably over achieved by 20 to 30%. In my opinion as the whole team was compensated for the achievement the sales target, it was knowingly kept low or the forecasting was not done properly. We can refer to exhibit 11, which show that few products achieved more than 200% of the target. This led to higher compensation packages in range of 115 to 120%. OutcomeOver the years the firm has only focused on B2B sales and not build any brand image for it self. New players as well as the OEM’s are entering the market, which has led to reduction in market share from 100% to 65%. EFI has failed to leverage its technological advancement and innovation for building the brand. Setting the sales target to the bare minimum has led to higher cost for the company in the form of sales bonus to the sales executive. As the firm is growing it has found it hard to forecast the sales for future, which has led to loss in revenue and leading to loss in market share. In 2005 we can see that is has incurred a loss for the first time due the sales and compensation policies it has developed. As it is mentioned in the case that the 3 different sales group approach the same customers with different product it leads to redundancy in the process.
2. For the above outcome, what is the sales process? The existing two-stage sales process was instrumental in bringing Fiery to market. It played a significant role in Fiery’s market success via multiple design wins and providing OEMs and resellers such as IKON with pre-sales support, service and training. But with changing market dynamics and several acquisitions by EFI, this sales process didn’t suffice. After the acquisitions of Printcafe, and VUTEk, EFI had three separate sales groups: EFI OEM sales force, EFI PPA (professional printing applications) sales force, and EFI VUTEk sales force. All three were dedicated sales forces but the product lines they were selling had significant overlaps in terms of markets and customers. The customers, to whom EFI OEM salespeople were targeting via OEM sales force, were also being targeted by EFI PPA and EFI VUTEk sales force. Because of this challenge EFI management was searching for ways through which the three product lines could support each other. This could have been achieved via cross-selling directly or via other means of joint value creation.The new sales force was divided among OEM, PPA, and VUTEk. The EFI OEM sales force was divided into two teams: EFI OEM account team and EFI OEM field sales team. The account team worked in dedicated client relationships. Their sole purpose was to win as many design wins as possible at the best possible price. The field sales team comprised sales development managers (SDM) and technical sales specialists (TSS). SDMs were responsible for educating OEM distribution channel about Fiery product line and for selling Fiery-based software add-ons directly to distribution channels. The EFI PPA sales force worked with a prospect base and an existing customer base doing product demonstrations, writing proposals and contracts, and developing post-sales leads. And the EFI VUTEk sales force sold VUTEk to commercial print shops. EFI was also planning to leverage EFI PPA’s existing customers to sell VUTEk.